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What are ChatBots and why are they important?

At it’s simplest a chatbot is computer programme that imitates a human conversation…So why is it important?

As a hobby I support local businesses to increase sales, and over the last few years I’ve been supporting some restaurants and hotels. For a one week period I setup and ran a test using a chatbot that gave a personalised experience to potential customers on a Social Media messaging platform. This system was easy to setup and run. In general the restaurants that paid for search advertising on Google had a click-through-rate (CTR) of around 4% and Facebook advertising was around 9%. During this test week the chatbot created a CTR of over 50%, and a major increase in bookings.

With more complicated systems, including adding Artificial Intelligence (AI) or additional support from humans, chatbots can be setup to be much smarter and chat with customers plus find out what they need. Where applicable, it can also learn from previous conversations and the more knowledge it gains, the better it is able to support customers. In addition, it can have lots of separate chats all at the same time, for example H&M can chat with lots of customers to make tailored recommendations to the customers taste (see https://bots.directory/kik/health-and-lifestyle/hm).

If you’re a business owner and short of time, this support could help sell your products and services. Rather than just receiving and monitoring comments on your website, social media or messenger the chatbot could give a personalised service, converse with and sell to customers, sell other products they might be interested in and help build brand loyalty.

Chatbots are becoming a familiar both as apps and chatbot platforms. For example around the home and office are virtual assistants such as Amazon’s Echo and Alexa, Microsoft’s Cortana, Apple’s Siri, Google’s Google Assistant and Samsung’s Bixby. Messaging apps are amongst the most popular mobile apps today, for examples Facebook’s Messenger, WhatsApp, WeChat and Viber combined have more users than popular social network apps. This has enabled businesses of all sizes to use messaging-app chatbots to expand their customer service, for example in e-commerce and sales.

SMM Marketing Platform reported that in just over six months chatbots, on Facebook alone, grew from 33,000 to 100,000 in April 2017 and some chatbots are getting great results, for example Adidas’s chatbot got 2000 new sign ups in two week and Just Eat chatbot created a conversion rate 266% higher than a simple advert.
Although it can be seen that chatbots are to become an important customer engagement tool, they are still in their infancy stage and need careful development. There are always going to be examples where humans try to sabotage the machine learning of these tools and at the moment, without some form of pre-scripted conversation, the natural-language processing and machine learning hasn’t evolved enough to enable fluid dialog between humans and bots.

Paul Dobson is a Senior Lecturer at Staffordshire University, Business School.